How 'trustees for life', 'religion as eligibility' deepen the fissures at Tata Trusts

The simmering boardroom tussle since last October at Tata Trusts, which holds a 66 per cent stake in Tata Sons, the parent company of the Tata Group, has brought to public scrutiny the deep fissures in one of India’s largest and oldest charitable trusts.

Recent developments that question the ‘trustees for life’ concept at Tata Trusts as well as the squabble over eligibility of non-Zoroastrians in some of the allied trusts are bound to have far-reaching implications on the way the trusts will be controlled and operated in the future.

First, it was Mehli Mistry, a low-key industrialist and former Tata Trusts trustee, who led the challenge against former bureaucrat Vijay Singh, questioning his continuance on the board of Tata Trusts despite crossing the age of 75. However, Mistry eventually found himself ousted not only from the Tata Trusts board but also from some of the other trusts that form the broader Tata Trusts.

As widely expected, he didn’t take things lying down. Despite his ouster from Tata Trusts, Mistry, a cousin of former Tata Sons chairman Cyrus Mistry, continues to be a thorn in the flesh for the current Tata Trusts management. He has challenged his ouster from the Sir Dorabji Tata Trust and Allied Trusts and requested for an administrator to run the philanthropic entities behind the Tata Group.

Mistry has also ruffled feathers by questioning the presence of non-Parsis—Singh and TVS Motor chairman emeritus Venu Srinivasan—on the board of the Bai Hirabai Jamsetji Tata Navsari Charitable Institution, one of the trusts belonging to the Tata Trusts. Srinivasan has stepped down as a trustee from the Bai Hirabai trust but Singh refused to do so.

Mistry has also been challenging the leadership at Tata Trusts (read Noel Tata). He has questioned Noel Tata’s objection to reappointing N. Chandrasekaran as Tata Sons chairman for a third time. In February, the Tata Sons board deferred a decision on reappointing Chandrasekaran after Noel sought a roadmap for revival of some of Tata’s loss-making businesses.

Last week, the practice of declaring certain trustees as ‘trustees for life’ came under focus, with advocate Katyayani Agrawal of SV & Co. moving an application, reportedly on behalf of Justice T. Raja, a former acting chief justice of the Madras High Court, before the Maharashtra charity commissioner.

The application stated that the lifetime trusteeship held by three (out of the six) trustees of the Sir Ratan Tata Trust—Noel Tata, Jimmy N. Tata and Jehangir H.C. Jehangir—“is in blatant and continuing violation of Section 30A(2) of the Maharashtra Public Trusts Act, 1950”.

As the debate raged, Tata Trusts was quick to act, saying it will “correct the anomalies” in the appointment of trustees by taking it up with the appropriate authorities. This meant paving the way for non-Parsis to be on the board of the trusts. “The Tata ethos has always been inclusive, secular and all-encompassing, and focused on philanthropy and service to the nation. Non-Zoroastrians have been continuously appointed to the Trust since 2000, following a legal opinion obtained from a former chief justice of India,” Tata Trusts said in a statement.

The Bai Hirabai Trust was created under the 1916 Codicil to the will of Sir Ratanji Jamsetji Tata, who died in 1918. The codicil did not provide for any restrictions in respect of trustees on grounds of ethnicity, race or religion. “The trustees also reiterated their full faith and confidence in the chief executive officer and his administrative stewardship of the Tata Trusts,” the statement added.

All eyes are now on how matters pan out on the legal front for Noel Tata. Even if they turn out to favour him and the trustees, the questions raised by the petitioners will continue to cause some disquiet at the 133-year-old Tata Trusts.

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